Are Raleigh’s empty promises on affordable housing a thing of the past?

Photo by DHICMore of these, please. Carlton Place, a DHIC project in Raleigh, two blocks east of Moore Square, is affordable housing: 64 of 80 units are available only to people of limited means

It's an annual rite in Raleigh. Each year, someone from the Congregations for Social Justice, a terrific group, writes a nice letter to city officials asking what they've done to advance the affordable-housing policies set out in Raleigh's 2009 comprehensive plan. And every year, a nice letter comes back from the planning department saying, "We're working on it. We haven't gotten there yet."

Not this year, though. When Larry Jarvis, head of Raleigh's reorganized Housing and Neighborhoods Department, heard that tale last week at a CSJ meeting, he shook his head emphatically.

"We're moving forward," Jarvis said. "The day of the promises, [that] we'll work on it next year, is long past."

Here's a capsule version of what Jarvis told CSJ:

• To date, the city's affordable-housing efforts have been ... well, modest would be a nice word.

• The plan has a $90.1 million price tag over the next five years. Available money, including federal funds that Raleigh can reasonably expect, is just over $42 million.

• The missing $47.6 million, if found, would be paid by Raleigh taxpayers.

Most of this is good news. Start with the fact that Jarvis is in Raleigh at all. One of city manager Ruffin Hall's first moves was to recruit him from Durham and install him atop the formerly autonomous departments of community development and community services.

Jarvis arrived one year ago this week. His charge from Hall: "Find ways to substantially beef up production" of affordable-housing units. He's on it.

The bad news, in my view, is that Raleigh thus far is looking solely to taxpayers for the needed funding, without seeking any share of developers' profits. Other cities take a share in the form of fees paid when high-rise buildings are approved. Raleigh should, too.

But it's not either/or. Even with such fees, most of the money Raleigh will need to finance housing on the scale that Jarvis envisions must come from property taxes in one form or another. As Jarvis says flatly: "Affordable housing is very expensive."

That's true. But for a booming city like Raleigh, it's not like we can't, you know, afford it.

On the subject of need, here's two numbers from Jarvis that should shock you. The first is 32,000, which is the number of Raleigh households paying more than 30 percent of their income for rental housing. Half of them pay more than 50 percent. They're considered "housing-burdened."

Then compare that 32,000 to the second number, 137. Over the past five years, that's how many new affordable rental units were created per year in Raleigh with funding from the city. That's absurd. Small programs designed to help the homeless and low-income homeowners are similarly inadequate.

Please don't tell me that we shouldn't be subsidizing housing for people of modest means. We already lavish subsidies—via the federal and state tax codes—on well-to-do homeowners, including the fact that the interest on your mortgage is tax-deductible no matter how big it is.

The effect is to drive housing prices higher compared with everything else, especially where the three most important factors in real estate are present—"location, location, location."

Thus, downtown housing is out of reach for the working class. So is housing in much of Raleigh. Many city employees, Jarvis says, are forced to live in Johnston or Harnett counties and commute—which is both aggravating and expensive.

The Jarvis plan has many components, including doubling the production of affordable rental units to 1,700 over the next five years, or 340 units per year.

Federal tax credits are available and would be deployed, but to get enough of them to support more than the current pitiful level of affordable rental-housing production, Raleigh will be required to put up more of its own money, about three-fourths of the $47.6 million gap.

Too ambitious? Charlotte's goal is 5,000 units over 10 years, which means asking voters to approve a $15 million bond every two years. Other cities aim far higher.

Raleigh hasn't had a housing bond since 2011, and before that, 2005. They were for $16 million and $20 million, respectively.

Alternatively, Raleigh could follow Durham's lead and earmark a small property tax increase for affordable housing. A 1-cent hike—$30 a year extra for a house assessed at $300,000—would yield $5.3 million a year, Jarvis says.

The City Council's Budget and Economic Development Committee, chaired by Mayor Nancy McFarlane, recommended the Jarvis plan last week. It was on the Council agenda for final approval Tuesday. But approval doesn't mean money. Funding is still "too be determined," which means public support will be crucial.

Or as Gary Blank told his fellow CSJ members, "When the time comes, I hope we're all out there pounding the pavement."

One last point: The city can't afford to finance affordable downtown rental units, Jarvis says, because the land is too expensive. But Raleigh can and must find a way to finance them at transit stops, especially in low-income areas where land costs are lower and people ride buses by necessity, not choice.

Two years from now, we'll know whether the new City Council we just elected has succeeded by how it's done this work.